The Super-deduction tax scheme could give you 25% back on the cost of a new telephone system

The super-deduction tax scheme has come at a great time for businesses looking to upgrade their telephony.

Many businesses are faced with a real need to move away from their existing ISDN based telephone systems, for some driven by Openreach’s plan to replace the whole of the existing digital network by 2025. Other businesses are simply looking to improve efficiencies in the workplace with the flexibility offered by next generation IP, cloud based, solutions.

There is good news for these businesses – from 1st April 2021*, through the super-deduction capital allowance, they could receive 25% of the cost back.

The UK government has announced an enhanced 130% first year super-deduction capital allowance on ‘main pool’ assets and a 50% first year allowance on ‘special rate pool assets’. This applies to qualifying plant and machinery, including computer equipment and servers. The super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest, ensuring the UK capital allowances regime is amongst the world’s most competitive.

The article refers to plant and machinery and in that includes computer equipment and office chairs. 

This change makes the UK’s capital allowance regime more internationally competitive, lifting the net present value of our plant and machinery allowances from 30th in the OECD to 1st.

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Southern Communications are not tax advisors and we strongly recommend you check details of the super deduction tax benefit with your tax advisor.

*The government initially stated this super deduction will be valid on expenditure incurred between 1st April 2021 and 31st March 2023.  Please check for any updates with your tax consultant or on the government website.